Recommendation 12

HM Government · verbatim extract Accepted

The Government agrees that BII’s investments must support inclusive economic growth. The Ministers agreed three strategic objectives for BII as part of its current 2022–2026 strategy: to invest in productive, sustainable, and inclusive development. These objectives ensure that poverty reduction, inclusive economic growth, and reducing inequalities are at the heart of BII’s approach. Moreover, these strategic objectives are integrated into BII’s investment decision making through its new Impact Framework which assesses each new investment against its contribution to these objectives. An important element of BII’s Impact Framework is its portfolio-level Impact Score. Designed with FCDO and adopted as part of its new strategy, BII assigns each new investment an Impact Score as an objective, data driven assessment of its alignment with BII’s strategic objectives. This enables BII to construct a balanced portfolio of impactful investments which meet its three strategic objectives. Investments which deliver higher impact across the three dimensions of productive, sustainable, and inclusive development are awarded higher scores. BII seeks to maximise the aggregate Impact Score it achieves Session 2023–24 each year with this being one of two main corporate performance measures set by FCDO for this five-year strategy period. BII’s performance against the impact score is also directly linked to staff renumeration. As set out in the response to Recommendation 11, BII’s application of its Impact Score methodology was independently assured in 2022 to verify BII’s assessments were in line with its Impact Score Implementation Manual. All three of BII’s strategic objectives ultimately target poverty reduction. Productive investments that help to build critical infrastructure and drive business development are central to job creation and unlocking economic growth. Through its sustainable investments, BII supports the decarbonisation of economies to limit the harms of global heating and helps people and businesses adapt to the changing climate. Moreover, BII’s strategic objective on inclusion incentivises BII to prioritise investments in poorer and more fragile countries, and those that reach low-income and marginalised groups within countries. The Government will continue to monitor and evaluate BII’s performance against the Impact Score, including the inclusion element of this which most directly focuses on poverty reduction. As part of this ongoing effort, in 2023 the FCDO requested an analysis of how implementation of the impact score was driving investment decisions, with a specific focus on the priority given to the inclusion element of the score.